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P&G 'buzz marketing' unit hit with complaint

By Bruce Horovitz, USA TODAY

October 19, 2005

Is Procter & Gamble the world's biggest packaged goods marketer breaking the law by enlisting teens to coax friends to try teen-tailored products?

One consumer advocacy group thinks it is. Commercial Alert on Tuesday filed a complaint with the Federal Trade Commission that says P&G's word-of-mouth marketing unit, Tremor, targets teens with deceptive advertising.

If successful, the complaint would have broad impact on the ad business. So-called buzz marketing is the industry's hottest trend. More than 85% of the nation's top 1,000 marketers now use some form, estimates Marian Salzman, trend-spotter at JWT Worldwide.

Advertising Age estimates buzz marketing to be a $100 million to $150 million industry. Though still relatively small in dollar volume, the provocative practice ranks among marketing's highest growth areas and is causing genuine angst within the industry.

"This is a practice that may be illegal," says Jonah Bloom, executive editor of Advertising Age. "It's probably only a matter of time before someone jumps on it" to stop it, he says.

Which is what Commercial Alert is trying to do. P&G, and several smaller buzz marketing specialists named in its complaint, "are perpetuating large-scale deception upon consumers" when people they recruit to promote products by word of mouth don't disclose that fact, says Gary Ruskin, executive director of Commercial Alert.

FTC officials declined to comment.

P&G's 4-year-old Tremor division has a panel of 250,000 teens ages 13 to 19 who are asked to talk with friends about new products or concepts P&G sends them. About 75% of members are female.

Steve Knox, CEO of Tremor, which works for outside clients as well as parent P&G, had no comment on the complaint. But, he says, "We're an incredibly ethical company." Panelists are not paid cash, he says, but get product samples or other materials.

"To be a member is empowering for a teen," says Knox. "You have a voice that will be heard, and you get cool information before your friends receive it."

Knox won't name any of Tremor's outside clients, citing client confidentiality.

Tremor recently did a campaign for P&G's Clairol Herbal Essences. The purpose was to help teens feel more comfortable about coloring hair. It sent some members cardboard booklets that let them push locks of their own hair through a hole and compare it with what the hair would look like in a new color.

"If we've done our work correctly, they talk to their friends about it," says Knox. Tremor doesn't tell members to say they are part of Tremor, he says, "because you never tell a (panelist) what to say."

Ruskin says that's bogus. At a minimum, his complaint says, the FTC should "issue subpoenas" to P&G executives at Tremor and other buzz marketers to determine whether their endorsers are disclosing that they are paid marketers.


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